CHINA Minzhong's shares were halted from trade before noontime on Monday after damning accusations from a short-seller caused the shares to lose half of their value.
The mainland vegetable seller said the halt was pending the release of a material announcement. The shares had dropped from Friday's close of $1.015 to as low as 50 cents - a loss of 51 per cent - before the halt stemmed the bloodshed.
California-based short-seller Glaucus Research Group on Monday stunned the market with a report that valued China Minzhong shares at zero. It accused China Minzhong of fabricating sales and payments and doctoring historical financial statements of its subsidiaries.
"Because we believe that the company has significantly overstated its sales and its capital expenditures, we doubt the authenticity of its reported receivables, cash balance and property, plant and equipment," said Glaucus Research Group.
"Given the limited offshore assets available for seizure and the difficulty recovering onshore assets (property and equipment) from alleged fraudsters under China's byzantine judicial system, we put a price target on Minzhong's shares of $0."
China Minzhong has been a relative darling in a scandal-hit S-chip sector - which refers to China companies listed in Singapore.
Bloomberg filings show that United States investment firm Franklin Resources holds a stake.
The Government of Singapore Investment Corporation - now simply known as GIC - used to hold 14.38 per cent of the company, which it sold to Indonesia's PT Indofood Sukses Makmur in March.